BILL ANALYSIS Ó SB 502 Page 1 Date of Hearing: June 22, 2015 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Anthony Rendon, Chair SB 502 (Leno) - As Amended April 8, 2015 SENATE VOTE: 37-0 SUBJECT: San Francisco Bay Area Rapid Transit District: purchase and delivery of electricity. SUMMARY: This bill authorizes the San Francisco Bay Area Rapid Transit District (BART) to purchase electricity generated by a renewable energy resource as defined in California's Renewable Portfolio Standards (RPS) Program. Specifically, this bill: a)Requires an electrical corporation that owns and operates transmission and distribution facilities that deliver electricity at one or more locations to BART, upon request by BART, and without discrimination or delay, use the facilities to deliver electricity generated by an eligible renewable energy resource. b)Defines "eligible renewable energy resources" to mean renewable energy resources eligible under California's RPS program. SB 502 Page 2 EXISTING LAW: 1)Requires any electrical corporation that owns and operates transmission and distribution facilities that deliver electricity at one or more locations to BART, upon request by BART, and without discrimination or delay, use the same facilities to deliver preference power purchased from a federal power marketing agency or its successor, or deliver electricity purchased from a local publicly owned electric utility (POU). (Public Utilities Code Section 701.8) 2)Requires the electric utility to bill BART for usage as though all the electricity purchased at transmission level voltages were metered by a single meter at one location and all the electricity purchased at subtransmission voltages were metered by a single meter at one location, as specified. (Public Utilities Code Section 701.8) 3)Prohibits an electrical corporation from terminating any lease entered into between BART and an electrical utility for special facilities for the purpose of receiving power at transmission level voltages to be terminated without the consent of BART. (Public Utilities Code Section 701.8) 4)Establishes the RPS program, which expresses the intent of the Legislature that the amount of electricity generated per year from eligible renewable energy resources be increased to an amount that equals at least 33% of the total electricity sold to retail customers in California per year by December 31, 2020. (Public Utilities Code Section 399.11) 5)Directs the State Air Resources Board to monitor and regulate sources of emission of greenhouse gases that cause global warming in order to reduce emissions of greenhouse gases. SB 502 Page 3 (Health and Safety Code Section 38510) FISCAL EFFECT: Unknown. COMMENTS: 1)Author's Statement: "BART trains are 100% electric, fueled by a power mix with a high percentage of clean hydropower. Each weekday, BART riders prevent over 4.5 million pounds of polluting CO2 from entering the atmosphere. The elected members of the BART Board of Directors would like the ability to procure more renewable energy by contracting directly with RPS eligible renewable electric generation resources. Under current law, those procurements would have to be done through third party transactions managed by one of the sources of electricity authorized for BART in state law. This constitutes an unnecessary barrier that the BART District seeks to eliminate." 2)Background: California's RPS was established in 2002 under SB 1078 (Sher, Chapter 516, Statues of 2002), and was accelerated in 2006 under SB 107 (Simitian, Chapter 464, Statutes of 2006) to require that 20% of electricity retail sales be served by renewable energy resources by 2010. The RPS was again increased in 2011, through SBX1-2 (Simitian, Chapter 1, Statues of 2011), to require that 33% of electricity retail sales be served by renewable energy resources by 2020. Furthermore, in 2006, the Legislature enacted AB 32 (Nunez, Chapter 488, Statutes of 2006), which tasked the Air Resources Board to adopt rules and regulations that would reduce SB 502 Page 4 greenhouse gas emissions in the state to 1990 levels by 2020. The RPS and AB 32 represent active steps taken by the state to reduce the adverse impact and threat global warming poses to the economic wellbeing, public health, natural resources, and environment of California. In January 2015, Governor Brown proposed in his inaugural address three ambitious goals to be accomplished within the next 15 years. These goals are: Increase from 33% to 50% our electricity derived from renewable sources; Reduce today's petroleum use in cars and trucks by up to 50%; and Double the efficiency of existing buildings and make heating fuels cleaner. 1)BART: BART is a regional rapid transit system built in 1972 that services communities in the Bay Area, including Alameda, Contra Costa, San Francisco, and San Mateo Counties, with plans to expand to Santa Clara County. The BART system has 44 stations and 104 miles of track with an estimated average weekday ridership of 403,680 and 122 million trips annually. BART trains are 100% electric with 53% of its power coming from clean hydro and renewable sources. In addition, the Federal Transportation Agency considers BART the cleanest SB 502 Page 5 transit system in the United States. 2)Procurement of Energy: Until 1995, BART procured its energy from its regional investor owned utility (IOU), Pacific Gas & Electric Company (PG&E). In 1995, the Legislature passed SB 184 (Kopp, Chapter 681, Statues of 1995), allowing BART to procure energy from a federal power marketing agency or its successor. In 2004, the Legislature passed SB 1201 (Torlakson, Chapter 613, Statutes of 2004), allowing BART to also procure energy from a POU. These measures allowed BART to access inexpensive federal hydropower. As a result, BART currently procures its electricity from the Northern California Power Agency, a local POU, and the Western Area Power Administration, a federal agency. BART also generates electricity from solar facilities located at BART facilities. BART was given the authority to procure electricity through a municipal utility, subject to fulfilling transmission and distribution cost responsibilities. Other transit systems seeking to procure power from a source other than their regional electricity provider would be required to do so through existing "direct access" programs. Direct access is not available in areas served by POUs. This bill would authorize BART to procure eligible renewable resources defined under the RPS. Although BART is the cleanest transit system in the US, its Board of Directors further seeks to reduce the system's carbon emissions by seeking to procure more energy from renewable resources. Currently, if BART wishes to procure renewable energy, it can only do so through a federal power marketing authority or a local POU. Allowing BART to directly procure electricity from an eligible renewable energy resource would remove this barrier and allow it to directly contract with eligible renewable resources. BART compensates PG&E for the use of the utility's SB 502 Page 6 transmission and distribution system. As a result, other customers of PG&E are not impacted by transactions proposed by this bill. 3)Arguments in Support: According to BART, the sponsor of the bill, "BART is the backbone of the Bay Area transit system, providing more than 400,000 daily passenger trips throughout Alameda, Contra Costa, San Francisco, and San Mateo Counties. BART's all-electric trains provide reliable and efficient transit service - a critical alternative to driving - that reduces the Bay Area's carbon footprint by nearly 4.5 million pounds of CO2 a day. SB 502 will authorize BART to procure electricity from generation facilities that qualify as renewable under the [RPS], and will go a long way into assisting the BART Board in its effort to procure more renewable energy and further reduce the local carbon foot." 4) Related Legislation: AB 197 (E. Garcia) 2015: This bill revises the RPS procurement process to emphasize greenhouse gas emissions and reliability factors. AB 645 (Williams) 2015: This bill establishes a RPS target of 50% by 2030, including interim targets of 38% by 2023, and 44% by 2026. SB 286 (Hertzberg) would expand the limit on Direct Access (DA) service for nonresidential customers of electrical IOUs. SB 350 (De Leon) 2015: This bill enacts goals that would direct a 50% reduction in petroleum use, require that 50% of electricity come from renewable resources, and require a SB 502 Page 7 doubling of the energy efficiency of existing buildings by 2030. 5)Prior Legislation: SBX1-2 (Simitian) 2011: Increases California's RPS to require all retail sellers of electricity and all IOUs to procure at least 33% of electricity delivered to their retail customers from renewable resources by 2020. Chaptered by the Secretary of State - Chapter 1, Statutes of 2011-12 First Extraordinary Session. AB 32 (Nunez) 2006: Creates a statewide greenhouse gas emission limit that would reduce emissions by 25% by 2020. Chaptered by the Secretary of State - Chapter 488, Statutes of 2006. SB 107 (Simitian) 2006: Requires retail sellers of electricity to procure at least 20% of their retail sales from renewable power by 2010. Chaptered by the Secretary of State - Chapter 464, Statutes of 2006. SB 1201 (Torlakson) 2004: Authorizes BART to receive power from a POU without discrimination or delay from any electrical corporation. Chaptered by the Secretary of State - Chapter 613, Statutes of 2004. SB 1078 (Sher) 2002: Requires utilities to increase procurement of electricity from renewable energy sources by at least 1% per year. Chaptered by the Secretary of State - Chapter 516, Statutes of 2002. SB 502 Page 8 SB 184 (Kopp) 1995: Authorizes BART to receive power from a federal power marketing agency or its successor without discrimination or delay from any electrical corporation. Chaptered by the Secretary of State - Chapter 681, Statutes of 1995. REGISTERED SUPPORT / OPPOSITION: Support San Francisco Bay Area Rapid Transit District (BART) (Sponsor) California Municipal Utilities Association California Transit Association Center for Sustainable Energy Clean Power Campaign Coalition for Clean Air Environment California Environmental Defense Fund SB 502 Page 9 Large-scale Solar Association Natural Resources Defense Council Northern California Power Agency Recurrent Energy Sierra Club California Solar Energy Industries Association Union of Concerned Scientists Vote Solar Opposition None on file. Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083 SB 502 Page 10